Two Boeing 787 incidents raise concerns about jet

NEW YORK (Reuters) - Boeing Co's (BA.N) new 787 Dreamliner suffered its second mishap in two days at the same airport with the same airline, extending a series of problems that have dogged the jet for more than a month and notched up concern about the plane.

A fuel leak on Tuesday forced a 787 operated by Japan Airlines (9201.T) to cancel takeoff at Boston's Logan International Airport. On Monday, an electrical fire erupted in a different 787 also operated by Japan Airlines at the Boston airport.

No passengers or crew were injured, but both incidents brought out firefighters, and the National Transportation Safety Board on Tuesday bulked up the team investigating the fire.

The incidents were stark reminders of a string of teething problems that have hit the Dreamliner since July, prompting federal regulators to call for engine and fuel line inspections, among other measures.

Boeing said it was aware of the issue and was working with its customer. Boeing stock ended down nearly 2.7 percent at $74.13 Tuesday, following a 2 percent decline on Monday.

Many Wall Street analysts continued to rate the stock a buy or outperform, mainly because Boeing is delivering jets at a rapid pace and reaping the resulting revenue.

Some expressed concern, noting the potential for the combination of a fire and a fuel leak to affect the public perception of Boeing and the Dreamliner.

Carter Leake, an analyst at BB&T Capital Markets in Virginia, downgraded Boeing to "hold" from "buy" based on the fire alone, noting that fires are potentially lethal and electrical issues are tough to solve.

He and others stopped short of calling it a game changer for Boeing.

"We're getting to a tipping point where they go from needing to rectify problems to doing major damage control to the image of the company and the plane," said Richard Aboulafia, a defense and aerospace analyst with Teal Group, a consulting firm based in Fairfax, Virginia.

"While they delivered a large and unexpected number of 787s last year, it's possible that they should have instead focused on identifying glitches and flaws, rather than pushing ahead with volume production," he said.

Aboulafia said there is still no indication that the plane itself is flawed.

"It's just a question of how quickly they can get all the onboard technologies right, and whether or not the 787 and Boeing brands will be badly damaged," he said.

The fuel leak on Tuesday was noticed at about 12:25 pm ET, after the plane had left the gate in preparation for takeoff on a flight to Tokyo. About 40 gallons spilled, and the jet was towed back to the gate, where passengers disembarked, said Richard Walsh, a spokesman for state transportation authority Massport. The plane departed about four hours behind schedule, according to the flight tracking site Flightaware.com.

A Japan Airlines spokeswoman, Carol Anderson, confirmed that the plane later departed.

The fire on Monday occurred on a different 787 plane that had just arrived from Tokyo and whose 183 passengers and crew had departed.

The NTSB said Tuesday that a battery in the auxiliary power unit aboard the plane jet had suffered "severe fire damage" and that surrounding damage was limited to components and structures within about 20 inches. It said the power unit was operating when the fire was discovered.

The agency sent one investigator to the scene on Monday and added two more on Tuesday. The FAA, Boeing, the Japan Transport Safety Board and Japan Airlines are also investigating.

The NTSB said Tuesday's fuel leak would not warrant an investigation because there was no accident.

Boeing said it is cooperating with the investigations and it would be premature to discuss details since the fire probe is continuing.

"However, nothing we've seen in this case indicates a relationship to any previous 787 power system events, which involved power panel faults elsewhere in the aft electrical equipment bay," Boeing said, referring to the area where the fire occurred. "Information about the prior events has been shared with the NTSB and they are aware of the details."

Separately, the Wall Street Journal, citing a source, reported that United Airlines (UAL.N) found improperly installed wiring in 787 electrical components associated with the auxiliary power unit, the same electrical system that caused the fire aboard a Japan Airlines 787 in Boston on Monday.

United spokeswoman Christen David said United inspected its 787s after the Boston fire incident, but she declined to discuss the findings, or to confirm the Journal report.

The fuel leak comes after the FAA in December ordered inspections of all 787s after fuel leaks were found on two aircraft operated by airlines. The leaks stemmed from incorrectly assembled fuel line couplings, which could result in loss of power or an engine fire, the FAA said.

Mechanical problems are not uncommon when new planes begin service and they often disrupt airline schedules, as they have done with United and Japan Airlines, experts said.

"I think we are dealing here with a situation where this aircraft is over-scrutinized for a number of reasons, including the birth difficulties," said Michel Merluzeau, managing partner at G2 Solutions, a boutique defense and aerospace consulting firm in Seattle.

The Dreamliner was delivered 3-1/2 years behind schedule.

"Don't get me wrong. A battery fire is a very, very serious event. Especially a lithium-ion battery," he added. "And we don't know what the problem is. But the 787s is still a very safe aircraft to fly."

Ken Herbert, an analyst with Imperial Capital, said he was concerned that some of the recent incidents could reflect issues with suppliers or product quality. And it might prompt airlines to take extra care with the plane. But he and other analysts cautioned against drawing conclusions until the cause -- and Boeing's response -- are known.

"The economics of this aircraft are still very favorable," Herbert said. "My outlook for the long-term success of the 787 certainly hasn't changed materially as a result of what's happened over the last few days."